BRP Inc. reported its financial results for the three- and six-month periods ended July 31, 2020. All financial information is in Canadian dollars unless otherwise noted. The complete financial results are available at Sedar, as well as in the Quarterly Reports section of BRP’s website.

“We are very pleased with our results, which are better than we initially anticipated, and with the exceptionally high demand for our products throughout the quarter. We expect the momentum to continue, as we closely monitor the global situation,” said José Boisjoli, president and CEO at BRP.

“Current trends have expanded our consumer base, creating a surge in new entrants. Together with our dealer network, we will now aim to capitalize on this opportunity by converting them into lifelong customers. I would like to express my gratitude and admiration to all our partners and employees for their resilience, which has been and will continue to be critical to our business continuity,” concluded Boisjoli.

Highlights for the Three- and Six-Month Periods Ended July 31, 2020

Revenues decreased by $226.2 million, or 15.5%, to $1,233.3 million for the three-month period ended July 31, 2020, compared with $1,459.5 million for the corresponding period ended July 31, 2019. The revenue decrease was mainly due to a lower volume of year-round products and seasonal products sold due to the temporary suspension of production, partially offset by a favorable foreign exchange rate variation of $13 million.

The company’s North American retail sales for powersports vehicles and outboard engines increased by 38% for the three-month period ended July 31, 2020 compared with the three-month period ended July 31, 2019. The increase was driven by year-round products and PWC.

Gross profit decreased by $79.4 million, or 24.2%, to $248.4 million for the three-month period ended July 31, 2020, compared with $327.8 million for the corresponding period ended July 31, 2019. The gross profit decrease includes a favorable foreign exchange rate variation of $4 million. Gross profit margin percentage decreased by 240 basis points to 20.1% from 22.5% for the three-month period ended July 31, 2019. The decrease of 240 basis points was primarily due to the costs related to the wind-down of the Evinrude outboard engines production, the under-absorption of fixed costs resulting from the temporary suspension of production and an unfavorable product mix. The decrease was partially offset by a positive pricing and sales programs variation due to the favorable retail environment.

Operating expenses decreased by $29.0 million, or 13.3%, to $188.9 million for the three-month period ended July 31, 2020, compared with $217.9 million for the three-month period ended July 31, 2019. This decrease was mainly attributable to cost reduction initiatives to mitigate the COVID-19 impact.

Revenues decreased by $330.1 million, or 11.8%, to $2,463.1 million for the six-month period ended July 31, 2020, compared with $2,793.2 million for the corresponding period ended July 31, 2019. The revenue decrease was primarily attributable to a lower volume of Year-Round Products, Seasonal Products and Marine products sold due to the temporary suspension of production, partially offset by a favorable foreign exchange rate variation of $25 million.

The company’s North American retail sales for powersports vehicles and outboard engines increased by 23% for the six-month period ended July 31, 2020 compared with the six-month period ended July 31, 2019, mainly due to an increase in SSV, ATV and PWC.

Gross profit decreased by $144.9 million, or 23.1%, to $483.5 million for the six-month period ended July 31, 2020, compared with $628.4 million for the corresponding period ended July 31, 2019. The gross profit decrease includes a favorable foreign exchange rate variation of $16 million. Gross profit margin percentage decreased by 290 basis points to 19.6% from 22.5% for the six-month period ended July 31, 2019. The decrease was primarily due to the costs related to the wind-down of the Evinrude outboard engines production and the under-absorption of fixed costs resulting from the temporary suspension of production. The decrease was partially offset by a positive pricing and sales programs variation due to the favorable retail environment.

Operating expenses increased by $121.8 million, or 28.4%, to $551.3 million for the six-month period ended July 31, 2020, compared with $429.5 million for the six-month period ended July 31, 2019. The increase was mainly attributable to the impairment charge recorded during the first quarter of Fiscal 2021 for the Marine segment and the restructuring costs for a total of $206.4 million, partially offset by cost reduction initiatives to mitigate the COVID-19 impact.

Powersports, Year-Round Products

Revenues from year-round products decreased by $113.4 million, or 15.4%, to $621.2 million for the three-month period ended July 31, 2020, compared with $734.6 million for the corresponding period ended July 31, 2019. The decrease was primarily attributable to a lower volume of products sold due to the temporary suspension of production. The decrease was partially offset by a favorable product mix in 3WV, lower sales programs due to a favorable retail environment and a favorable foreign exchange rate variation of $9 million.

North American year-round products retail sales increased on a percentage basis in the low-sixties range compared with the three-month period ended July 31, 2019.

Seasonal Products

Revenues from seasonal products decreased by $105.8 million, or 24.7%, to $322.7 million for the three-month period ended July 31, 2020, compared with $428.5 million for the corresponding period ended July 31, 2019. The decrease was driven by a lower volume of products sold due to the temporary suspension of production and an unfavorable product mix in PWC, partially offset by lower sales programs in PWC due to favorable retail environment.

North American seasonal products retail sales increased on a percentage basis in the high-teens range compared with the three-month period ended July 31, 2019.

Powersports PA&A and OEM Engines

Revenues from powersports PA&A and OEM engines increased by $35.1 million, or 20.2%, to $209.1 million for the three-month period ended July 31, 2020, compared with $174.0 million for the corresponding period ended July 31, 2019. The increase was mainly attributable to a higher volume of PA&A coming from strong unit retail sales and higher replacement parts revenue driven by an increased usage of products by consumers.

Marine

Revenues from the Marine segment decreased by $45.4 million, or 35.9%, to $81.0 million for the three-month period ended July 31, 2020, compared with $126.4 million for the corresponding period ended July 31, 2019. The decrease was mainly due to the wind-down of the Evinrude outboard engines production resulting in additional retail sales incentives and a lower volume of outboard engines sold. The decrease was partially offset by the additional revenues following the acquisition of Telwater Pty Ltd (“Telwater”) during Fiscal 2020.

North American outboard engine retail sales increased on a percentage basis in the low-teens range compared with the three-month period ended July 31, 2019. North American boat retail sales increased on a percentage basis by the mid-twenties range compared with the three-month period ended July 31, 2019.

Link: BRP